Waltham Corp owns 24,000 of the 60,000 outstanding shares of Melrose Corp's common stock and uses the equity method of accounting (not the fair value option). During 2010 Melrose earned $200,000 and paid cash dividends of $160,000. Melrose is Waltham's only investment.
1. If the beginning balance in the investment in Melrose account was $400,000, the end-of-year balance at December 31, 2010 should be:
A. $400,000
B. $480,000
C. $440,000
D. $416,000
E. $500,000